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 February 9: The Dreaded “M” Word As the Iowa legislature continues to debate a proposed B5 Fuel Quality Standard, opponents of the legislation are fond of labeling it a “mandate.” They know Iowans are an independent lot who don’t like being told what to do. The “mandate” buzzword is a powerful weapon, but there is another unpopular “M” word that needs to be discussed: Monopoly. As Big Oil hides behind front groups named “Iowans for Consumer Fuel Choice,” what they don’t want you to realize is that Iowans don’t have fuel choice. Consumers get what the Big Oil companies offer. They control the distribution infrastructure that moves fuel throughout the country. A recent poll found that more than 80% of Iowans would use B5 if that had the choice, but today only about 10% of Iowa diesel fueling stations offer a biodiesel choice. So the B5 Fuel Quality Standard is about an “M” word: monopoly. The B5 standard will break the Big Oil monopoly on diesel options in Iowa. Just some fuel for thought…
January 29: Why all the Fuss about an Ethanol Requirement? Many people quip that they’re philosophically opposed to mandates? What is a mandate? It’s a law. So are these people opposed to government? We’ve all seen the signs on Iowa highways warning “Buckle Up – It’s the Law.” No, it’s a mandate. Now the Iowa legislature is considering mandating that cell phones can’t be used while driving. And state regulators are considering banning a certain alcoholic product. Plus, who can forget the controversy when lawmakers mandated that smokers could no longer damage their health in public places. As the future unfolds, an ethanol fuel quality standard is being proposed. Many laws are considered as a way to protect the safety of our citizens. Well then, requiring all gasoline to be blended with ethanol would give motorists a fuel that lowers greenhouse gas pollution, reduces carbon monoxide emissions and is biodegradable, providing this and future generations with safer air to breathe. That’s fuel for thought.
January 12: Indirect Land Use Change: Absolutely! The USDA reported in today’s January crop report that America’s farmers produced a record corn crop in 2009 – 13.2 billion bushels. Notably, the record crop was produced on 7 million fewer acres than the previous record corn crop in 2007. While renewable fuels critics are busy pushing the bogus theory that U.S. biofuels cause Amazon deforestation, they ignore the very real land use change going on right under their noses. Amazing advances in seed technology and farming practices are resulting in larger crops on fewer acres year after year. American farmers are producing more corn for food, feed and exports than ever before – all while also supplying our nation’s growing ethanol industry. Land use in the U.S. is changing for the better – driven by farmer productivity.
December 29: Is California King??? Today California is the single largest market for ethanol in the U.S., but under this state’s so-called Low Carbon Fuel Standard U.S. ethanol could disappear from the state over the next couple of years. Why? Because the California regulators bought into the discredited notion that producing ethanol here in the U.S. leads farmers in Brazil to burn down the rain forest. But California has a small problem – the federal government already acted in this area with the 2007 Renewable Fuels Standard 2. And California set up more favorable rules for California-produced ethanol than Midwest ethanol. According to a joint lawsuit filed by the Renewable Fuels Association and Growth Energy those facts violate the supremacy and commerce clauses of the U.S. Constitution. So, is California king? I guess a court will now decide. Just some fuel for thought…
December 28: Ethanol bad for all Iowa consumers! Now that’s heresy! In a recent Waterloo Cedar Falls Courier article by Jim Offner, he asked his readers to excuse him while he indulged in a little heresy. He stated that ethanol may be good for some Iowa farmers, but it’s bad for all Iowa consumers. This statement is unfounded and drums up “old news” that lacks journalistic resourcefulness.
Blaming ethanol for last year’s spike in food prices because the writer thinks ethanol cuts into the Green Giant’s supply of niblets is beyond hilarity. Despite his lack of understanding between food-grade and industrial-grade corn, the reality is that the ethanol industry returns one-third of every bushel of field corn processed into ethanol into a high-protein, high-energy co-product for livestock. So not only does ethanol not compete with food, it actually supplies food for cattle, hogs and chickens. Now, that’s real “food (fuel) for thought.”
December 22: Pork Profits in 2010 – What in the World? Massive pork processor Smithfield Foods recently projected that 2010 will bring a return to profits for hog farmers. This is great news. But when my 3-year old is faced with something new and confusing she often exclaims, “What in the world!!??” This news raises just such an occasion. For the past two years, Smithfield CEO Larry Pope has blamed all the hardships of pork production on ethanol. The problem was the ethanol blenders tax credit, the RFS2 schedule, potential approval of E15, etc. So how can profits return to the pork industry in 2010 when next year ethanol production will set a new record, the tax credit is still in place, the RFS2 schedule will likely be implemented and the EPA has strongly signaled that E15 will be approved? What in the world? Just some fuel for thought…
November 17: OPEC "happy" with $80 per barrel oil during recession. Really? OPEC's president recently stated the cartel is "happy" with current oil prices and that even $80 per barrel crude oil is "not too high" as the world economy tries to recover. Just remember this attitude from the price-fixing oil cartel the next time someone tells you that ethanol and biodiesel should compete in the "free market." OPEC drove prices down to the $20s in an effort to bankrupt biofuels during the recession. Now before demand has picked up, oil is back to $80 per barrel. That is not the free market. That is price manipulation aimed at driving out the competition and then fattening OPEC's bottom line. Just some fuel for thought...
November 13: 2009: Ethanol Up so Food is Down? Wrong! With news that ethanol production is on track to exceed a record 11 billion gallons in 2009, some might think that there will be less corn left over for food and feed. Nothing could be further from the truth. The latest USDA crop report shows that record corn yields will provide more than enough “new” corn for the increased ethanol production with millions of bushels left over. In fact, since 1990 increased corn production has completely satisfied the growth in the ethanol industry – not one kernel less for food and feed. Now that’s some fuel for thought!
November 5: Are foreign automakers hurting U.S. E85 sales? Hai! (Yes) As Iowa and the U.S. works to decrease its dependence on foreign oil by boosting the availability and use of E85, another “foreign dependence” is increasingly hampering this effort. According to Autodata Corporation, of the top ten selling vehicles in the U.S. in October, only two were available as flexible fuel vehicles (FFVs) capable of using E85. Luckily these vehicles (Ford F-150 and Chevy Silverado) were the top two in sales. But the next eight top sellers (produced by Toyota, Honda, and Nissan) had two things in common: they were not FFVs and they were produced by Japanese automakers. Despite U.S. automakers making more and more models available as FFVs, most foreign automakers have offered few – if any – FFVs to U.S. consumers. For this reason, we urge Iowans to support Sen. Harkin’s legislation that would require a growing percentage of vehicles made in the U.S. to be FFVs so consumers will have fuel choice. But the bill needs to be expanded. The requirement shouldn’t be on vehicles “made” in the U.S., but rather on vehicles “sold” in the U.S. Let’s not let one foreign dependence exasperate another. Just some fuel for thought.
October 30: #4 National Ranking Not Good Enough for Iowa…on E85 Pumps, that is! This week, the State of Illinois celebrated the opening of its 200th public E85 station, and we offer Illinoisans our sincere congratulations on reaching this milestone. However, Illinois’s success should serve as a wake-up call for Iowa. Why is that, you might ask? As the nation’s leader in both ethanol plants and production, and with the nation’s most generous incentive to install E85 pumps, surely Iowa is also #1 in E85 stations, right? Unfortunately, wrong. Currently, Iowa is ranked #4, and I’m not just talking about college football. Iowa is fourth in the nation in E85 refueling locations as well, trailing Minnesota, Illinois and Wisconsin. Iowa needs to refocus its efforts to make E85 more available throughout the state so that Iowa can be the nation’s leader in not just producing, but also using ethanol. So the next time you stop in at your local convenience store that doesn’t offer E85, tell them you’re sick of Iowa being stuck at #4 in the nation! Just some fuel for thought…
October 28: Ethanol Powers Profits for Oil Refiner. Say what? Valero Energy, the largest independent refiner in the U.S., recently reported a 3rd quarter loss of nearly $500 million as it dealt with higher crude oil prices and reduced gasoline demand. Nothing too surprising there. But look a little closer. For the same quarter, Valero reported $49 million of operating income from its ethanol business. (Valero bought several plants in Iowa and elsewhere from the bankrupt VeraSun Energy.) I’m not naďve enough to predict that ethanol will continue to be the dominant profit center for Valero going forward – but I can’t help but smile at the irony of this situation given the doom and gloom predictions for ethanol’s future from many pundits only a few months ago. I wonder if Exxon Mobil took note. I wonder if I want them to?! Just some fuel for thought…
October 23: Poll Showing Strong Support for Corn Farmers and Corn Ethanol is Good…But Also a Call to Action! The National Corn Growers Association released a poll this week that showed that 90% of Americans have a positive image of farmers. Also, 65% of Americans support using corn for fuel ethanol. Now getting 2/3 of Americans to support anything is good. But it is disturbing that more Americans supported using corn for sweeteners (67%) and non-food products like fiber and packaging (73%). I have nothing against those uses. The fact that ethanol ranked below other non-food uses demonstrates that the ethanol industry still has work to do. Clearly, some Americans have bought into the negative, unfounded attacks on ethanol. The good news is those attacks haven’t eroded a strong, national base of support for corn ethanol. But this poll shows we can’t take that support for granted. Ethanol supporters must continue to emphasize that we only use the corn starch – the corn protein goes right back into the feed markets as distillers grains. Just some fuel for thought…
October 20: USDA Says Energy Balance of Biodiesel is 4.5 to 1 and Climbing. Did EPA Get the Memo? A recent joint study by the USDA and the University of Idaho confirms that biodiesel still has the best fossil energy balance of any motor fuel. The report estimates that soybean-based biodiesel yields 4.56 units of energy for every unit of fossil energy consumed over its life cycle. In addition, the study projects that biodiesel’s energy balance will only get better with time due to higher soybean yields, reduced tillage, reduced pesticide use, and increased energy efficiency for both biodiesel plants and soybean processing facilities. Comparing biodiesel’s 4.5 to 1 energy balance with conventional diesel’s 0.84 to 1 energy balance leads a thoughtful observer to question how the EPA, in its proposed RFS2 rulemaking, managed to credit biodiesel with only a 22 percent reduction in greenhouse gas emissions compared with conventional diesel. As the good folks at EPA deliberate how to improve their RFS2 rule, let’s hope they “got the memo” on USDA’s groundbreaking biodiesel research. Just some fuel for thought.
October 16: What do Iowa and Hawaii have in common when it comes to renewable fuels? Both Shenandoah, Iowa and Honolulu, Hawaii have ideal growing conditions for algae. Seriously. The Green Plains Renewable Energy ethanol plant in Shenandoah is now growing algae in tubes that contain red and blue LED lights to simulate Hawaii’s climate. These lights “trick” the algae into believing they’re in tropical Honolulu! Once harvested, the algae can be converted into oil that can be refined into biodiesel, which is blended with petroleum diesel to reduce emissions and our dependence on foreign oil.
What’s so unique about this algae pilot project is that the warm water, waste heat and carbon dioxide from the ethanol plant are combined to provide a perfect environment for growing algae (once the light show is added). This promises to reduce the carbon footprint of the ethanol facility. It’s phenomenal to imagine that a little green organism that thinks it’s in Honolulu can have such a positive impact on our environment. Now, that’s Fuel for Thought.
October 15: Are there really “non-food” biofuels? Yes, but it’s not what you think. Iowa is in the midst of hosting the annual World Food Prize, a highly prestigious award that recognizes people who help feed the world. Over the last couple of years, it has become topical for folks attending the week-long festivities to debate using “food” to produce biofuels. We all know how misguided that debate has been. The productivity of Iowa’s farmers is allowing us to produce fuel from corn starch and soybean oil while still supplying more food to the world than ever before. But it is disturbing to see a few biofuels advocates in this setting take up the chant that the “future” will be about “next generation” biofuels that don’t come from “food” crops.
Any land devoted to growing “non-food” crops for biofuels could have been used, no matter how unproductively, to grow food. Therefore switchgrass, for example, isn’t really a “non-food” crop as some would suggest – it’s being grown on land that could grow “food.” Looking ahead to the next two to three decades, it is impossible to see how the advances in seed technology for traditional biofuels feedstocks won’t result in corn starch and soybean oil remaining the backbone of the biofuels feedstock supply chain. But there will be “non-food” supplements in the forms of crop residues, municipal solid waste, wood waste, and animal fats. And I’m confident we’ll see algae and dedicated energy crops like switchgrass join the mix over time as well.
But the next time you hear about how we should use “non-food” crops to produce biofuels, ask the person what land was used to grow this supposedly “non-food” crop and what food crop grew (or could have grown) on that land the year before. Just some fuel for thought…
October 13: Can Renewable Fuels Really Improve U.S. Energy Security? Exxon Mobil Says Yes! At a recent speech to the Economic Club of Washington, DC, Exxon Mobil CEO Rex Tillerson noted that U.S. gasoline demand peaked in 2007 and that “motor vehicle gasoline demand is down, is headed down, and is going to continue to head down.” Tillerson said the trend is due to the increased use of biofuels along with higher mileage standards for vehicles and hybrid vehicles. This is great news for America, but you kind of get the feeling Tillerson noted this trend with a touch of sorrow. And while Tillerson didn’t directly state the obvious conclusion, it is easy to see that less gasoline use combined with more renewable fuels use equates to reduced foreign oil imports and greater U.S. energy security. The impact of renewable fuels on energy security is already evident! Just some fuel for thought.
October 9: Can children really breathe easier on school buses fueled with biodiesel? You bet!
The millions of kids who ride school buses every day deserve the best possible air to breathe. Why not protect your children’s health with the proven benefits of biodiesel? Fueling school buses with biodiesel instead of petroleum-based diesel significantly reduces air pollutants that can cause asthma, bronchitis, lung inflammation and even lung cancer. Kids who ride buses running on biodiesel also report less headaches and miss fewer days of school. Biodiesel is better for the environment as well, and it’s made right here in Iowa. Does biodiesel sound like a good choice for your school? If so, tell your school board member, superintendant or transportation director to make the switch to biodiesel, and while you’re at it, tell your school officials to apply for a $2,500 Biodiesel Backer Award from the Iowa Renewable Fuels Association. For more information on the health benefits of biodiesel and how to apply for a Biodiesel Backer Award, visit http://www.iowarfa.org/educators.php. Just some fuel for thought.
October 7: Why is Big Oil Working to Make RFS2 Compliance Harder? Throughout the public comment period for EPA's renewable fuels standard (RFS2) rulemaking process, Big Oil has staunchly argued for a rule that makes it more difficult for corn-based ethanol and soybean-based biodiesel to qualify for the program. For example, Big Oil strongly urged EPA to impose large indirect land use penalties on these biofuels. Some have asked why, as parties obligated to use a certain amount of biofuels, would Big Oil work to restrict the supply of biofuels they could use to meet their federal requirement. It makes no sense if Big Oil wants RFS2 to work smoothly. It only makes sense if Big Oil wants the program to appear as a hardship.all the better if their real goal is to ask Congress to scrap RFS2. Just some fuel for thought.
October 6: GAO says ethanol tax credit not driving demand, but what do the numbers show??? A recent report issued by Congress' Government Accountability Office (GAO), claimed that the ethanol blenders tax credit was not driving demand. Instead the GAO stated that only the federal Renewable Fuels Standard (RFS) was creating demand for ethanol. Therefore, the GAO continued, Congress might want to rethink whether the blenders tax credit is still needed. Well, I have a lot of respect for the GAO, but their challenge is to be experts on every conceivable topic a member of Congress might ask about. They do remarkably good work given the staff and time with which they have to work.
However, on a complex issue like this, sometimes the GAO will look at a snapshot of the situation and make determinations without fully understanding the long term implications. When the GAO were researching this report several months ago ethanol prices were not attractive compared to gasoline prices (wholesale) so ethanol demand was being primarily driven by the RFS requirement. But after the first quarter of this year, ethanol prices have become attractive compared to petroleum - with the help of the blenders tax credit. Since May, official government statistics show ethanol use above the 10.5 billion gallons per year rate required by the RFS. In fact, in the most recent month for which data is available, July ethanol demand was at a pace of nearly 11.5 billion gallons per year - ONE BILLION gallons above the RFS requirement. This would not be happening if not for the blenders tax credit. That incentive to petroleum companies helps ensure the RFS is a floor for ethanol use, not a ceiling. Further, it also helps ensure that the RFS will be filled with (mostly) U.S. ethanol and not subsidized foreign ethanol. It is working. Just some fuel for thought.
October 1: I don't own a FFV, so I can't help E85, right? Wrong!
Many ethanol supporters haven't bought a new vehicle recently and, therefore, don't drive a flexible fuel vehicle (FFV) capable of using E85. But they can still help promote E85. I used to stop every now and again at a certain gas station chain in Iowa that has these wonderful little mini chocolate chip cookies in a cup for sale at their checkout counters. But this particular chain doesn't offer E85 or mid-level blends at any of their Iowa stations. So I have said goodbye to the tasty treats and I buy gasoline from stations or chains that offer E85 at some of their locations - even when I drive my old E10 truck. Join me in helping E85 by buying your E10 from gas stations that offer higher blends - and let them know that's why you stop on their side of the road. It helps ethanol. It helps Iowa. And it might even help your waist line. Just some fuel for thought.
Sept. 18: Smithfield Foods – the Guardian of small farmers. Really??
Recently Smithfield Foods CEO Larry Pope declared U.S. ethanol policy “makes absolutely no sense at all” and is “devastating to small farmers in this country.” He also compared using corn for ethanol to burning the floors in your house to provide heat in the winter. (Do the floors, like corn, grow back each year?) Mr. Pope is a proud member of the “Big Livestock” coalition that longs for the days of $1.20 corn in America. You remember those days – how good they were for small farmers, rural communities, and reducing the size of farm program costs on taxpayers??? You remember how Smithfield could buy your corn for less than your cost of production and made your on-farm livestock operation uncompetitive and unprofitable??? I’m not to sure how much credibility someone has who thinks the 1980s were the heyday for small farmers and wants to return to those farm prices. Just some fuel for thought.
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